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Upper Funnel Experiment: Winning Back Top-of-Mind Awareness

A US online player partnered with Foresight Strategy to understand how to rebuild consideration and mindshare in one of their top categories.
Written by: Mick Hedberg

The Challenge: Upper Funnel vs Lower Funnel

Historically, this client focused its marketing efforts on the ‘lower funnel’ (promoted listings and placements) and made fewer investments in the ‘upper funnel’ (driving awareness, consideration, etc.). In the past decade, the company started feeling the after-effects: not being the preferred option among online shoppers and making it difficult to compete for share in an increasingly competitive ecommerce category. Recently, the company decided to begin rebalancing more of their investments towards ‘upper funnel’ initiatives taking a step towards winning back its status of being a “staple of online buying”.

Our client picked one category to start with. Due to confidentiality, we can’t disclose the actual category, but we will use “home improvement” as an example, given the many similarities with the actual category. As a large and growing market, it was ideal for testing the upper funnel deterioration experienced by the company. The primary questions they wanted to answer were: how is the initial investment impacting the business? How can we optimize & build synergies between upper and lower funnel efforts?

The Approach: The Power of Segmentation

Using the company’s own internal data and segmentations, Foresight was able to identify the consumer groups where upper funnel advertising was most likely to be effective.

While most consumers purchase home improvement products to perform essential repairs and maintenance, there are others who are genuinely passionate about home improvement as a passion and a hobby. Unsurprisingly, the latter category purchases more often, spends more when they do make purchases (adding up to 2.5x more spend in the category annually), and is more likely to talk about their experiences with others generating positive word of mouth for products and services that win their approval.

Foresight’s analysis showed that once the “passionate” segment was made aware of the company’s offerings in the category, they were nearly 20% more likely to become active considerers, and 30% more likely to become purchasers. Adding this together, Foresight found that making one of these consumers aware of the company’s offering was worth four times more than consumers from any other consumer segment.

The Recommendations: Thoughtful Targeting

At Foresight, we increasingly hear from companies battling with choices on how to allocate investments between “upper funnel” or “lower funnel” initiatives. It is a difficult decision to make, especially for the challenging nature of measuring business impact on campaigns that focus on brand build (upper funnel) vs transactions (lower funnel).

Both approaches have the same objective: grow the business. However, brand building tends to play out over a longer period which can mean that learning cycles and optimization can also take much longer to play out (or never occur at all if effective measurement tools aren’t put into place… but more on that another time).

The best way to get around this is to target consumers with a high likelihood to be responsive to upper funnel advertising, and who are most likely to quickly convert to considerers or purchasers. It may sound simplistic, but it is surprisingly common to see companies doing the opposite. A mistaken assumption about upper funnel advertising is that it should be broad in nature. Just because advertising dollars are spent towards building upper funnel metrics (like awareness and consideration) does not mean that the objective is to reach as many people as possible with the campaign. Oftentimes, all that is required is reviewing your existing consumer studies and datasets through the right lens to identify where advertising dollars are most likely to succeed in moving the needle.

The effect of doing the opposite can result in extremely low ROI. So, effective, thoughtful targeting in your upper funnel marketing should be as high of a priority as anywhere else.